UK tourism industry employs around 2.9 million people

Published on : Wednesday, January 9, 2019

The hotel industry in UK  form a key part of the wider tourism and business traveller ecosystem. Foreign tourists arriving in the UK grew by 9% in volume in 2017, with almost 40 million people adding 4% in value, to close to £24.5 billion.

 

In this record breaking year, London remained the top destination for inbound tourist spending, at 55% of the total amount, while the rest of England brought in 32%, and Scotland saw 9%, with Wales at 2%.

 

 

The tourist industry employs around 2.9 million people, representing around 10% of employment, so should the sector encounter headwinds in the near future, it could have dire consequences for the nation.

 

New analysis from PwC suggests that such a scenario could soon become a reality, however. Exploring how the hotel industry is changing in 2018 to meet the expectations of tourist and business customers while major economic and political shifts are under way, the Big Four firm’s report has warned that price pressures resulting from Brexit and uncertainty surrounding the ease of travel could be set to derail the tourist trade in 2019.

 

 

At present, the hotel occupancy rates in 2018 are projected to be stable, with growth on the previous year standing at 0.1% for occupancy in London and 0.2% in ADR in London.

 

 

This is considerably down on the previous years’ ADR growth rate, however, which saw expansion of 0.2%. nA number of factors have affected growth levels in terms of total occupancy. Increased supply on the one side have reduced scope for total occupancy growth, as demand growth came in lower between 2017 and 2018 (2.2% vs. 1.8%). The hot June weather as well as some large-scale events in the UK saw visitor numbers increase at the end of H1, 2018, with a positive impact of weather and events pushing up demand into August.

 

 

The relatively slow year in 2018 is projected to continue into 2019. Forecasters see an increase in overall supply while overall demand is likely to slow further. The supply increase in regional rooms is set to be up around 3.3% for 2019, an increase of around 21,000 on the around 658,000 available rooms per night for 2018. The London supply meanwhile is set to see growth of 2.8% or around 4,300 new rooms in the new year.

 

 

The research points to further price pressures for the London and wider markets – reflecting the growth in supply, while demand is set to be relatively tepid.

 

 

The firm projects Average Daily Rate (ADR) growth of 1.2% in the provinces for 2019, while for London growth is set at around 0.8%. Occupancy might even decrease in the capital. Meanwhile, revenue per available room (RevPAR) is set to be relatively stagnant, at £122 for London and £55 for the provinces in 2019.

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